The financial impact on hospitals due to treating COVID-19 patients has been substantial.  Recent reports by Becker’s Hospital Review, the American Hospital Association and Moody’s suggest there has been a material negative impact on hospitals’ cash flow.

From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to shut down or file for bankruptcy. At least 42 hospitals across the U.S. have closed or entered bankruptcy this year, and the financial challenges caused by the COVID-19 pandemic may force more hospitals to do the same in coming months. 

Hospitals are estimated to lose $200 billion between March 1 and June 30, according to a report from the American Hospital Association. More than $161 billion of the expected revenue losses will come from canceled services, including nonelective surgeries and outpatient treatment. Moody’s Investors Service said the sharp declines in revenue and cash flow caused by the suspension of elective procedures could cause more hospitals to default on their credit agreements this year than in 2019. 

Congress passed legislation in March and April that provided a combined $175 billion in funding for hospitals and other healthcare providers to help offset lost revenue and expenses linked to the COVID-19 pandemic. HHS has yet to distribute $72 billion, or 41 percent, of the approved funds, according to a report released June 23 by the Senate Homeland Security and Governmental Affairs committee. 

In addition to distributing the remaining approved funds, the committee report recommends that Congress pass the Health and Economic Recovery Omnibus Emergency Solutions Act, which includes an additional $100 billion in grants for healthcare providers. The report also recommends that HHS make additional disbursements to hospitals in COVID-19 hot spot areas and rural and safety-net hospitals. 

Healthcare professional organizations have been reporting these facts to members of Congress. They continue to advocate for the remainder of funds available for hospitals and providers to be distributed as soon as possible. We continue to advocate for additional funding for hospitals and physicians to allow them to continue providing patient services as essential workers.